​​Money: The Metaphoric Religion

Money isn’t looked upon by their material value, but rather by their widespread conviction that they are valuable, exactly as people have faith in God. Money is a metaphorical belief system, similar to that of a religion, it can only hold sway over society indefinitely if people continue to place their unwavering trust in it. This is merely the notion that it flourishes on the support of its devoted followers, not the requirement for a monetary system within a community.

Milton Friedman draws attention to the very abstract kind of currency used on the Island of Yap. While traditional money is materialized as paper bills and coins, they used large, solid, thick stone wheels for their medium of exchange, which they refer to as fei. After reaching an agreement on the price of the fei, since it is too big to be transferred with ease, the stone’s new owner is happy to accept a simple recognition of possession. It was not the strange physical attributes of the fei that made this system so perplexing, but rather the fact that ownership did not necessitate actual possession. In Milton Friedman’s essay, “The Island of Stone Money,” he explains the unique monetary system used on the Island of Yap. The people of Yap’s belief in these large stone objects is what inherently gave them their value. After being acquired by the German Government, the heads of the several districts were instructed to have the roads repaired and placed in excellent order because many of these routes and highways were in poor shape. The demands remained unheeded. A man went to each of the districts to impose a “fine”, which in their case was a mark on each of the most precious fei; indicating ownership to the German Government. This immediately worked like a charm; the inhabitants, who were now pitifully poor, turned to the roadways and fixed them so effectively. The fines were dismissed as soon as they fixed the roads. The earliest records of money demonstrate how cultures transition from monetary systems with inherent value such as coins or in this case a limestone to paper money, which is valuable because it is a tool for exchanging commodities and services. Over time the material slowly degrades itself but the idea still stays the same. These huge stone items’ intrinsic value came from the Yapese people’s faith in them. This astonishing illustration of the power of faith resembles blind devotion in a particular religion.

In NPR’s podcast, This American Life: The Invention of Money, they claimed that money is fiction and continue to go over how the Brazilian real started as a fabrication known as an URV. Despite the fact that it didn’t exist, they gave it the name URV, Unit of Real Value. For a long time, Brazil’s economy has been suffering from excessive inflation rates. A group of four economists misled the public into believing they were preventing an inflationary spiral. They came up with a crazy, implausible plan that eventually succeeded. They aimed to create a new form of money that was reliable, consistent, and dependable. Their money now has a sense of steadiness and regularity that it previously lacked. After some time, the government was able to issue the Brazilian real, a new currency that was broadly accepted by the general public and significantly decreased inflation. These four men invented URV, which became a reality while being totally fictional. The Brazilians implemented faith into the four economists creating a belief system that put them in a good economic state.

This belief of value in money is also seen in one of the world’s top virtual currencies. Bitcoin is popular for its high trading value and a cryptocurrency that skips over financial institutions or central banks. The price of Bitcoins fluctuate more than any regular stable currency or even most stocks. It’s another example of how money is a creation and is supported by a belief. Although the creation is quite complex, in its simplest form the idea of manifestation of money. Almost like the people of Brazil, anyone can use their real currency to buy virtual currency for trade or gain capital. Bitcoin is a virtual money that is rife with risk and vulnerability. Only valuing based on what someone is willing to pay for it. Only if people buy into the myth that Bitcoin is a valued kind of money can they place their trust in it. This shows that money is an abstract idea that is highly reliant on the widespread acceptance of its worth. Money is the fiction that we all chose to believe in every day. It is a very abstract take on currency as said in Jeff Reeves’ article for the Market Watch, “Opinion: Bitcoin has no place in your — or any — portfolio.” Reeves goes on to talk about how this cryptocurrency honestly lacks a true value because it doesn’t have a central bank like we have in real life. Since it has gone through so many peaks and declines, it isn’t very trustworthy and isn’t something people in today’s world should bother investing in. If nothing else, these early examples prove that the value of money is not dependent on a concrete object itself, but rather a concept of its worth. If Bitcoin was perceived as a fraudulent source and no one wanted to acquire it, its value would simply vanish. This demonstrates how money is an abstract concept that depends heavily on others accepting its value. 

Ultimately, our culture connects having a lot of wealth with success and happiness. The importance of money and its inherent value are universal across all families and cultures, despite variations in religion, ethics, and customs from one family to the next. The reason metal coins and paper currency have such sway over society is something we are never taught. It isn’t because of their material value, but rather because of the widespread conviction that they are priceless, like our faith in God.

References:

Friedman, Milton. “The Island of Stone Money.” Diss. Hoover Institution, Stanford University, 1991. https://miltonfriedman.hoover.org/internal/media/dispatche

Planet Money. (2018, February 19). The invention of money. This American Life. https://www.thisamericanlife.org/423/the-invention-of-money

Reeves, J. (2015, January 31). Opinion: Bitcoin has no place in your – or any – portfolio. MarketWatch.

https://www.marketwatch.com/story/bitcoin-has-no-place-in-any-portfolio-2015-01-28